Hospitals threaten to stop cashless facility under central govt schemes
Several associations of doctors, hospitals and nursing homes have cited low rates and delayed payments, and threatened to stop the cashless treatment of millions of beneficiaries under the central government’s medical care schemes for its employees, pensioners and their families unless timely reimbursements are made.
The warning comes as bills worth at least ₹1,000 crore under schemes like the Central Government Health Scheme (CGHS) and Ex-Servicemen Contributory Health Scheme (ECHS) remain pending, according to Association of Healthcare Providers (India) or AHPI. At least 3.2 million people across India are covered under CGHS and 550,000 under ECHS.
AHPI director-general Dr Girdhar Gyani said the group is not saying that it will stop treating patients covered under schemes like CGHS. “…all we are saying is that we will stop providing cashless treatment.”
Gyani called it a stopgap measure to deal with the delay in payments. “The beneficiaries can pay for the service at the CGHS rates and then seek reimbursements from the government,” said Gyani
Several large private hospitals like Lilavati, Hinduja, Apollo, Max, Fortis, Ganga Ram, Christian Medical College Vellore, are among at least 10,000 members of the AHPI spread across 33 states and Union Territories.
Medical associations say that special rates insurance providers have negotiated rates that are 30 - 50% lower than the regular rates, and are compounding the problem. “GIPSA [General Insurance Public Sector Association], an organisation formed by the four public insurance companies [Oriental Insurance, New India Assurance, National Insurance, and United India Insurance], has cartelised the market and negotiated arbitrarily low prices with hospitals for empanellment,” said All India Ophthalmological Society president-elect Dr Mahipal Sachdev, who is also the chairman of Centre for Sight chain of hospitals.
Delhi Voluntary Hospitals’ Forum secretary Dr PK Bharadwaj said that there is not a single scheme under which payments are made on time. “For CGHS, the wait is at least six months. This creates a difficult situation for hospitals as they are then unable to pay the salaries, their vendors for medicines, consumables, etc. and the cycle keeps continuing,” said Bharadwaj.
A spokesperson for Max Healthcare chain of hospitals in Delhi said that they have bills worth around ~150 crore pending under the central government schemes. “The Hospital [chain] signed [up] for schemes such as the CGHS in October 2014 on pre-negotiated or decided government rates. The scheme had a provision that 70% of a bill amount had to be cleared within five working days post submission. While that remains a distant dream, the dues pending under the CGHS over the years have led to a difficult cash flow situation for the hospitals,’’ said the spokesperson.
“We are finding it difficult to cope up with this huge burden, which continues to grow by the day.”
The CGHS rates are anyway unsustainable, say medical associations.
“The CGHS rates were last revised in 2014 and the problem is it was done through bidding. ...the government invited bids on various procedures and selected the lowest bidder. It did not matter whether service providers were from Delhi or Muzaffarnagar... now entire India has to follow those rates,’’ said Delhi Medical Association president-elect Dr Girish Tyagi. He added that some of the bidders even bid for services that they were not even providing. “These low rates are not sustainable.”
A health ministry official, who requested anonymity, acknowledged that there has been a fund crunch. “…but by this month-end, additional funds are expected to be released. So the problem of reimbursing CGHS-empanelled hospitals should be solved soon.”
“An additional allotment of ~3,500 crores have been sought to overcome the problem. To check and curb the misuse of funds in ECHS and inflated billing empanelled hospitals, strict monitoring is being done. Disciplinary action is taken against defaulting hospitals,” according to a statement from minister of state for defence, Sripad Naik, in Parliament.
Medical associations have also sought an increase in the rates provided under the government schemes, including those of the Delhi government.
Tyagi said that around 500 to 600 smaller nursing homes and hospitals in Delhi were on the brink of closure. He added that the Delhi government’s Delhi Arogya Kosh (DAK) and Farishtey schemes pay a little better than the CGHS and Ayushman Bharat.
“...the prices are still inviable. And, unlike the CGHS or Ayushman Bharat, all hospitals in Delhi have to participate in the [DAK and Farishtey] schemes and cannot opt out. There is a need for revision of these rates based on the actual costs of treatments.”
Poor families are provided up to ~5 lakh insurance cover annually under the Ayushman Bharat scheme.
Ayushman Bharat chief executive officer Indu Bhushan said that the rates have now been rationalised. “…we have actually found that the rates of some packages were in fact higher. About a month ago, we reduced the rates of 79 packages and increased the rates of 280 packages. Now, our rates are competitive,’’ said Bhushan.
Bhushan said that they are also ensuring that payments are made on time.
“Fixing costing is a complex issue and the Ayushman Bharat rates have been based on a study by the Post Graduate Institute of Medical Education and Research, Chandigarh, and consultations with several practitioners.”
Giyani said that the government should survey its own hospitals to determine the cost of each procedure, add to it the costs of land, electricity and human resources to arrive at final rates for the private sector.
Bhardwaj said that people think that hospitals earn a lot because they are always full, but the margins are extremely slim.
“At a small hospital or nursing home, over 50% of patients come in through the CGHS or other government schemes paying the same rates. Around 10% are given treatment totally free under various schemes, and 20% use insurance,’’ said Bhardwaj.
“Now with insurance providers also reducing rates, the burden falls on the 20% who pay out of pocket.”
Bhardwaj said that on an average the rates insurance companies provide are just 5%-10% more than those of the CGHS.
Medical associations say that fixing prices arbitrarily for procedures also curtails the use of new technologies.
“Insurers will not pay more than the price fixed by the GIPSA for a procedure if patients opt for a better or newer method that costs a little more even if the total cost is less than the insured amount. Most hospitals have signed up for these packages as they need patients but it is driving out innovation,” said Sachdev.
With the insurance sector expected to cover the majority of the population, it is an increasing concern.
“Over the next three to five years, 70% of the patients going to any hospital would be under either insurance cover or some form of the government health schemes. So, where will the money come from?” asked Gyani.
Patients’ rights groups say while timely payment of dues is essential, the rates are not irrational. “... the CGHS rates are workable, but Ayushman Bharat rates are lower. These packages are for high volume, low margin type of operations… ,’’ said Abhay Shukla, the national convener of Jan Swasthya Abhiyan, a patients’ rights group.
Shukla said that the private health care sector needs to reduce the overpricing of medicines and consumables.
“The hospitals should also stop arbitrarily overcharging patients who are not covered by any insurance or schemes.”